Q4 saw the publication of a judgment from 23 September 2020 in which the Bundesgerichtshof ruled in favour of members of the German train tracks cartel. [1] The case was between unidentified cartel members and the transport operator for the city of Essen. The highest court referred the case back to appeal because it found that the appeal court had erred in applying the burden of proof, specifically by reversing the burden of proof when establishing whether the claimant had suffered damage. The judges held that there is a (rebuttable) presumption that prices affected by a cartel will be higher than those under normal market conditions, but that the burden of proof when assessing damage should not be reversed. This presumption is only one of the factors to be considered by the court.
This case is important because the highest court referred the case back, supplying detailed guidance on how to quantify damages, as well as helpful instructions and clarification on how to assess the defence that damage was passed on. The judges held that:
- A cartel member that wants to invoke the passing-on defence must present tangible evidence to support the contention that the damage was passed on, whereby the level of detail required depends on the specific circumstances of the case, in particular the complexity of the economic context.
- If – particularly in cases of scattered damages – there are a relatively small number of damages claims, which are by indirect cartel victims and difficult to quantify, the court should not accept the passing-on defence because that would involve the risk of the defendants being awarded unfair relief.
- BGH 23 September 2020, KZR 4/19 – OLG Düsseldorf LG Dortmund.[↩]
On 2 December 2020, Deutsche Bahn announced that its subsidiary DB Barnsdale AG had reached a settlement with British Airways for their role in the air cargo cartel. [1] Of the 11 defendant airlines from which it was seeking damages, this constitutes the seventh settlement reached by Deutsche Bahn. The amount of the settlement has not been disclosed.
In October 2020, the Regional Court of Hanover decided to ask the European Court of Justice for guidance on the scope of the decision of the European Commission regarding the truck cartel. [1] The Regional Court of Hanover is requesting clarification on the scope of vehicles (“products”) covered by the decision and on whether these also include specific types of vehicles, such as rubbish trucks and fire engines. The answer to that question will enable the court to determine the extent to which the European Commission’s decision is binding. The decision to refer was published on 14 October 2020 and stems from a damages lawsuit brought before the Regional Court of Hanover by a German municipality. According to the decision to refer, the literal text of the European Commission’s decision is unclear, leaving room for different interpretations. The court also refers to the content of an information request directed to the truck manufacturers by the European Commission in 2015, which seems to exclude information on “special vehicles”. According to the Regional Court of Hanover, the questions need to be clearly resolved at this stage as the answers will determine the success or failure of the case presently before the court and will also be important in future proceedings.
On 14 October 2020, Deutsche Bahn AG (DB) published a press release stating that it had reached a settlement with ThyssenKrupp GfT Gleistechnik GmbH and ThyssenKrupp Materials Services GmbH on damages for (possible) cartel agreements in the “private market rail cartel”. [1] The background to the settlement is a fine imposed in 2013 by the German competition authority, the Bundeskartellamt, on DB and various construction companies that carried out infrastructure projects for DB. ThyssenKrupp supplied, among other things, the materials for those projects. The details of the settlement have not been disclosed.
On 30 September 2020, the Regional Court of Dortmund awarded damages in a claim concerning the train tracks cartel. [1] This decision is interesting because the Regional Court quantified the (cartel) damage on the basis of its own findings. The court did so because it considered the costs of an expert to be disproportionate in relation to the (suspected) damage in question. The defendants had submitted expert advice themselves, but the Regional Court dismissed it as unreliable. In addition, according to the Regional Court, the conventional method of quantifying (cartel) damage did not apply here due to the special nature of the case. There was, for example, no market that could serve as a comparative market. Consequently, the Regional Court arrived at its own estimate. The price increase due to the cartel was estimated at ‘at least 15%’. The Regional Court based its quantification on factors that also apply in the determination of a cartel fine, such as the cartel’s duration, scope and degree of organisation. The estimated percentage was also felt to be of the same order of magnitude as the percentages to be found in well-known studies on average cartel-related price increases and other decisions of European District Courts. The amount of damages ultimately awarded was approximately € 62,000.
On 25 November 2020, the Amsterdam District Court rendered an interlocutory judgment in a case between four government bodies in the Gulf States of Bahrain, Saudi Arabia, Kuwait and Oman [1] on the one hand and 15 legal entities involved in groups of Prysmian, [2] ABB, [3] Pirelli,[4] Goldman Sachs [5] and Nexans [6] on the other. [7]
The backdrop is the power cable cartel whose existence was established by the European Commission in 2014. [8] The European Commission established that European, Japanese and South Korean manufacturers of underground and submarine power cables had divided power cable projects between themselves between 18 February 1999 and 29 January 2009. The defendants are (indirectly) connected to the addressees of the Commission decision.
The claimants of the Gulf States are seeking a declaratory judgment that the defendants acted unlawfully because they participated in the cartel, or that the knowledge of the parent companies addressed must be imputed to them. In separate ancillary actions, the defendants are seeking that the District Court decline jurisdiction.
The District Court partially concurred with the defendants in this respect. It held that, although it had jurisdiction to rule with regard to the Dutch defendants, this was not the case for the foreign defendants. Nor could the Dutch defendants serve as anchor defendants. The first requirement of a sufficiently close connection between the claims had not been satisfied. The mere fact that the Dutch defendants are (indirectly) connected with the addressees of the decision did not mean that they were also involved in the infringement under competition law or that parent companies’ liability could be imputed to them. The District Court therefore deemed itself to lack jurisdiction with regard to the foreign defendants.
- Electricity & Water Authority of the government of Bahrain (Bahrain), GCC Interconnection Authority (Saudi Arabia), Kuwait Ministry of Electricity and Water (Kuwait) and Oman Electricity Transmission Company SAOC (Oman).[↩]
- The defendants are Prysmian Netherlands B.V., Draka Holding B.V., and Prysmian Cavi e Sistemi S.R.L[↩]
- The defendants are ABB B.V., ABB Holdings B.V., ABB AB, and ABB Ltd.[↩]
- The defendant is Pirelli & C S.p.A.[↩]
- The defendant is The Goldman Sachs Group, Inc.[↩]
- The defendants are Nexans Nederland B.V., Nexans Cabling Solutions B.V., Nexans Participations S.A., Nexans S>A. and Nexans Franse S.A.S.[↩]
- Amsterdam District Court 25 November 2020, ECLI:NL:RBAMS:2020:5882.[↩]
- Decision of the European Commission of 2 April 2014 in case AT.39610 (‘Power Cables’).[↩]
On 24, 25 and 26 November 2020, the District Court held a (unique) three-day hearing in a case between various claims vehicles on the one hand and truck manufacturers DAF, MAN, Iveco, Volvo-Renault, Daimler and Scania on the other. The District Court dealt with three subjects, one per day: the scope of the European Commission’s decision, the trucks manufacturers’ defence to the effect that no damage could have been suffered, and the claim for the surrender of documents. In addition, discussion took place on the value that the District Court is entitled to attach to procedural documents and judgments in other (foreign) proceedings. The claimants relied, for instance, on a procedural document from Ryder, a claimant in proceedings in the UK, in which information from the European Commission’s file had been incorporated. The claimants, also relied on a decision by the UK Competition Appeal Tribunal in which the facts laid down in the decision had been adopted despite objections from the truck manufacturers. On 15 May 2021, the District Court rendered judgment on these subjects. We will discuss them in Q(2021-2).
On 30 December 2020, a 12-year-old girl took the first step in bringing a representative action pursuant to Civil Procedure Rules, rule 19.6, against TikTok and/or Musical.ly. [1] The legal claim has been brought on behalf of millions of children using TikTok in the UK and the European Economic Area who have been impacted by the app’s actions. It is alleged that the defendants have misused the claimant’s private information and processed her personal data in breach of the duties imposed by the General Data Protection Regulation (GDPR) 2016/679/EU and the UK GDPR. The remedies sought are a declaration, damages, injunctions, and orders for erasure of the data in question. The damages claimed are for “loss of control of personal data”.
On 11 December 2020, the UK Supreme Court rendered its long-awaited judgment on Merricks v. Mastercard, rejecting Mastercard’s appeal against the judgment of the Court of Appeal of England and Wales of April 2019. [1] The appeal related to the procedure for collective proceedings concerning claims for damages in competition cases. It was the first collective proceedings case of this sort to reach the Supreme Court, and addressed important questions about the correct legal requirements for certification of a claim. The main elements of the Court of Appeal’s decision were:
- When the Competition Appeal Tribunal (CAT) determines whether claims are “suitable” to be brought in collective proceedings, this entails that they are more suitable for being brought in collective proceedings than as individual claims.
- At the certification stage, the applicant is not required to meet a certain threshold for the merits of the case or the evidence, apart from the ordinary tests applicable when the defendant applies to strike out or for a summary judgment.
- Collective proceedings may result in the award of aggregate damages that reflect the total loss of the group, which damages can then be divided among the group in a manner that does not have to reflect the actual loss of each individual.
The Supreme Court referred the case back to the CAT.
Wirecard was a listed German company that facilitated online payments. In June 2020, Wirecard’s board announced that € 1.9 billion in reported cash was missing or had possibly never existed. Following this announcement, an increasing number of (suspected) accounting irregularities emerged, and the share price collapsed. Meanwhile, Wirecard was declared bankrupt, and various proceedings were initiated by aggrieved investors against, among other parties, Wirecard’s accountant, Ernst & Young. For example, a class action is ongoing in the United States before the U.S. District Court for the Eastern District of Pennsylvania against Wirecard, Ernst & Young, a number of members of Wirecard’s management board and a member of its supervisory board. In Germany, five class actions have been initiated before various District Courts against Wirecard, Ernst & Young and two German regulators, namely the Bundesanstalt für Finanzdienstleistungsaufsicht and the Deutsche Prüfstelle für Rechnungslegung. With parliamentary and criminal investigations also under way in Germany, this has been called the largest accounting scandal since the Enron affair.
